This paper is concerned with how changes in the global economy, triggered by actions undertaken in one part of the world, can affect the lives and the prospects of poor rural people, as well as the environment they live in, in another very distant part of the world. It analyses the linkages between changes in the European Union (EU) sugar regime and the economic fortunes and the environmental future of a very poor and highly water-stressed area in southern Africa-the Incomati River Basin-where sugar production is the single most important economic activity. The case study epitomises the complex interactions between trade liberalisation on the one hand and poverty and the environment on the other.